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CONTENTS As Seen in Entrepreneur Magazine: Hot or Not? 42 Minority Entrepreneurs 43 As Seen in Entrepreneur Magazine: Provide Advice to an Entrepreneur about Improving a Business through Certification as a Woman-Owned Business 44 Entrepreneurial Intentions within Existing Organizations 45 Managerial versus Entrepreneurial Decision Making 45 Strategic Orientation and Commitment to Opportunity 46 Commitment of Resources and Control of Resources 46 Management Structure and Reward Philosophy 47 Growth Orientation and Entrepreneurial Culture 48 Causes for Interest in Corporate Entrepreneurship 48 Establishing a Culture for Corporate Entrepreneurship 51 Leadership Characteristics of Corporate Entrepreneurs 53 Establishing Corporate Entrepreneurship in the Organization 54 Problems and Successful Efforts 56 3 ENTREPRENEURIAL STRATEGY: GENERATING AND EXPLOITING NEW ENTRIES 64 Opening Profile: Justin Parer 65 New Entry 66 Generation of a New Entry Opportunity 67 Resources as a Source of Competitive Advantage 67 Creating a Resource Bundle That Is Valuable, Rare, and Inimitable 68 Assessing the Attractiveness of a New Entry Opportunity 70 Information on a New Entry 70 As Seen in Entrepreneur Magazine: Elevator Pitch for Project Alabama 71 Comfort with Making a Decision under Uncertainty 72 Decision to Exploit or Not to Exploit the New Entry 72 Entry Strategy for New Entry Exploitation 73 Environmental Instability and First-Mover (Dis)Advantages 74 Customers Uncertainty and First-Mover (Dis)Advantages 76 Ethics: Do the Right Thing 78 Lead Time and First-Mover (Dis)Advantages 78 As Seen in Entrepreneur Magazine: Provide Advice to an Entrepreneur about Being More Innovative 80

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xvi CONTENTS Tax Attributes of Forms of Business 263 , Tax Issues for Proprietorship 263 Tax Issues for Partnership 263 Tax Issues for Corporation 265 The Limited Liability Company versus the * S Corporation 265 S Corporation 265 Advantages of an S Corporation 266 Disadvantages of an S Corporation 266 Ethics: Lawyers Explain the Steps to Take If Your Business Partner Violates His or Her Obligations to the Business 267 The Limited Liability Company 267 Advantages of an LLC 268 Designing the Organization 268 Building the Management Team and a Successful Organization Culture 271 As Seen in BusinessWeek: Elevator Pitch for 20x200 Web Site 272 The Role of a Board of Directors 273 The Board of Advisors 274 The Organization and Use of Advisors 274 10 THE FINANCIAL PLAN 280 Opening Profile: Tony Hsieh 281 Operating and Capital Budgets 282 Ethics: Are You a Good Leader? 284 Pro Forma Income Statements 285 Pro Forma Cash Flow 288 As Seen in BusinessWeek: Provide Advice to an Entrepreneur about Solving Their Cash-Flow Problem to Stay in Business 290 Pro Forma Balance Sheet 292 Break-Even Analysis 294 Pro Forma Sources and Applications of Funds 296 As Seen in BusinessWeek: Elevator Pitch for Beer Chips 297 Software Packages 298 PART 4 FROM THE BUSINESS PLAN TO FUNDING THE VENTURE 303 11 SOURCES OF CAPITAL 304 Opening Profile: Scott Walker 305 An Overview 308 Debt or Equity Financing 308 Internal or External Funds 309